Police in the old city of Hyderabad on Friday detained 18 illegal financiers, who were exploiting the poor and needy by giving loans on high interest rates following demonetisation.

In a drive against the loan sharks, the south zone police conducted raids in different parts of the old city and detained 18 accused. The police seized documents relating to property valued at about Rs 20 crore, stamp and registration documents and promissory notes from them.

Deputy Commissioner of Police (South Zone) V. Satyanarayna said cases were booked against four accused while they were verifying the documents seized from others.

The moneylenders exploited the situation created by demonetisation of high value currency notes by giving cash loans to people on interest rates ranging from 25 percent to 40 per cent. Those who failed to pay the interest were forced to keep their property as collateral.

The police found that they advanced loans to people for marriages and other expenses by taking their signatures on blank papers.

The official estimated that there are 200 illegal moneylenders in the old city. He vowed to curb the menace by launching special drives against the illegal financiers and said the police will even invoke Preventive Detention Act against the accused.

Police were investigating how the moneylenders had crores of rupees in cash with them when people were facing hardship due to shortage of liquid cash. Income tax officials will conduct the probe by screening the documents seized from illegal financiers.

The DCP said only those who have taken small loans were coming forward to complain while others who have kept their property documents with the financiers were afraid to lodge complaint.

During the last few years, police conducted several special drives against the illegal money lenders. The Muslim-majority old city is notorious for the illegal activities of financiers. Most of them are criminal elements who threaten and even kidnap the people who fail to pay the interest. In a few cases, they have even killed the victims.

Police attribute this to poverty and ignorance. A large number of petty traders take loans from these financiers and get trapped in a never-ending debt cycle.